Electric Grid Study: Are Renewables Under Fire?

Keeping the renewables industry at the edge of their seat, the U.S. Department of Energy (DOE) says Secretary Rick Perry’s controversial and much anticipated study on electricity markets and reliability has been delayed.

Originally scheduled for release on June 26, the study has been put off to an unspecified date sometime in early July. The DOE has stated that the study will not be released until after being fully reviewed by the secretary.

On April 14, Perry requested a 60-day study to examine the U.S. electrical grid’s supply of baseload power – the reliable power supply typically generated by coal, natural gas or nuclear power plants – and federal regulations that provide incentives for renewables, such as wind and solar.

According to Perry’s memo, the concern surrounds “the erosion of critical baseload resources,” the way baseload power is “dispatched and compensated,” and the “diminishing diversity of our nation’s electric generation mix.”

Many in the renewables space believe this study aligns with the current administration’s promises to dismantle emissions-reduction regulations and promote coal jobs and its position on the effects of climate change.

Just this past week, Perry testified before Congress asserting his continued skepticism of the science of climate change, noting that man-made global warming “is not settled science” – a contradiction of findings from the Environmental Protection Agency, the National Oceanic and Atmospheric Administration and the United Nations’ Intergovernmental Panel on Climate Change.

As would follow, Perry’s study and its potential impacts on renewable efforts have garnered the attention of those with renewable energy interests.

In the July issue of North American Windpower, Rob Gramlich, formerly of the American Wind Energy Association, explains that the study put clean energy companies on high alert, noting that they hoped to “dodge a bullet that many initially felt was aimed directly at renewable sources and the policies that support them.”

Nonetheless, there is still a great deal of mystery surrounding the study and what may come of it.

According to Frank Maisano, partner at Bracewell’s Policy Resolution Group, most of that ambiguity arises from the “undefined” state of the current administration and the complexity of grid management.

The study’s delay is unsurprising, he explains, considering that the administration still has a great deal of restructuring to do.

As for renewables, specifically, Maisano doesn’t believe the study will necessarily deal any major blows to the industry.

“Some people think it’s going to be unfavorable toward renewables. There’s a role for both [sides] to play. It comes down to better management by grid operators,” he says. “This is a complex issue – it’s not going to be a simple solution.”

According to Maisano, renewable energy development holds undeniable value, and looking ahead to possible policy changes, it’s up to those in the sector to make that value known.

“It’s important the renewables industry continue to show the value they have in terms of reliability and participation in the marketplace and the role they play in terms of creating jobs and economic development and the role they have in providing cleaner generation,” he says. “As long as they keep discussing this, they’ll have a place in the [policymaking].”

While it is certainly possible that the “Study Examining Electricity Markets and Reliability” could necessitate no significant market changes or could, actually, prove renewables’ reliability, we will just have to wait a bit longer to find out.